Prior agreements about a proposed downtown hotel and conference center took center stage Tuesday as the Frederick County Council considered a five-party memorandum of understanding that would help secure state funding.
Councilmen Kirby Delauter (R) and Billy Shreve (R) indicated they would not support the current proposed agreement. Democratic council members pointed out that it was similar to an agreement both men passed unanimously in 2014 while on the then-Board of County Commissioners.
The agreement at hand forms a broad framework for responsibilities and funding sources of a proposed $84 million public-private partnership with Plamondon Hospitality Partners. Plamondon plans to build a 200-room hotel and 24,000-square-foot conference center along Carroll Creek. About $30.35 million will come from city, county or state government funding mechanisms.
The county’s role in the agreement is approval of a $2.8 million TIF, or tax-increment financing, bond.
The TIF lets the county use a portion of anticipated property tax revenue generated from the project to be issued as bonds to fund the project’s development.
Former county Chief Administrative Officer Doug Browning, now working as needed as a special projects manager for the county executive’s office, pointed out the similarity between the 2014 agreement and the current proposal.
But Shreve said Browning “is mistaken” if he thinks the new agreement is similar to the former one.
“If you want to try to pin this on the previous Board of County Commissioners, that is false,” Delauter said. “Totally false.”
He said things changed in the intervening years, including other proposed conference centers in the city.
Randy Cohen, owner of the FSK Holiday Inn, has planning approval to overhaul his hotel and conference center property. He has been a vocal critic of the public funding components of the proposed downtown project.
“When I voted on this in 2014, as a commissioner, we weren’t picking winners and losers in the hotel business,” Delauter said.
But Councilwoman Jessica Fitzwater (D) and Councilman Jerry Donald (D) read portions of the 2014 agreement, the purpose of which was “to show support of ... and agree in concept” to use a TIF for the proposed downtown hotel project.
“To say that what is on the table now is a 180 from that is just completely false,” Fitzwater said. “I’m not saying there haven’t been changes; there clearly have been. But the portion of the county’s funding that we’re discussing right now is ... it can’t be more similar to what was written in 2014.”
Councilman Tony Chmelik (R) said he didn’t oppose the $2.8 million county contribution through a TIF, but doesn’t agree with the larger puzzle that includes that money.
Delauter said he was concerned about the finances of the Maryland Economic Development Corp., or MEDCO, which the state created to finance private projects. MEDCO likely will issue state capital bonds for the proposed downtown conference center, but Delauter listed other projects the organization financed that have failed to meet estimated revenue.
The Frederick Board of Aldermen is slated to vote on the proposed agreement on Oct. 20.
It will come back to the County Council for a vote on Oct. 25.
According to the agreement, the city of Frederick would own the land, a 1.86-acre tract that is the former site of The Frederick News-Post.
The city will lease a portion of the site to the developer for the hotel, which will be built and owned by Plamondon.
The city will also lease a portion to MEDCO, which will own the conference center.
MEDCO will then enter an agreement with Plamondon, which will assume sole responsibility for conference center operations.
Plamondon will agree that the city, county and state will have no ongoing obligations for the hotel and conference center operations.
The city can decide to operate and maintain on-site parking, which will be open to the public, or can hand that to the operator.
The city of Frederick’s costs will be about $5.95 million: $2.2 million in tax-increment financing or a similar funding mechanism, $3.5 million in cash and bond revenue from the city parking fund; and $250,000 allocated in the city’s capital budget, according to the draft agreement.
The county would use tax-increment financing or a similar mechanism to provide $2.8 million in funding, the agreement says.
During the 2016 General Assembly session, state lawmakers pre-authorized $15 million from the state's capital bond budget — which would be overseen by either the Maryland Stadium Authority or MEDCO — for the next two budgets. But funding must be in Gov. Larry Hogan’s proposed 2018 and 2019 budgets or added by the General Assembly.
Lawmakers also allocated an additional $1 million capital budget expense for early stages of downtown hotel planning and construction. That expenditure is contingent on the completed memorandum of understanding. The agreement must go back to legislative budget committees, which will have 45 days to review and comment.
The proposed hotel and conference center property at 200 and 212 E. Patrick St. is owned by a business entity formed by members of the Randall family. The Randall family also owns the parent company of The News-Post.